A Look at Real Housing Prices and Incomes: Some Implications for Housing Affordability and Quality
AbstractThis paper was presented at the conference "Unequal incomes, unequal outcomes? Economic inequality and measures of well-being" as part of session 2, " Affordability of housing for young and poor families." The conference was held at the Federal Reserve Bank of New York on May 7, 1999. The authors report that the cost of good housing has risen for low-income individuals. The National Association of Realtors affordability index shows that affordability conditions are better today than at any time in the past twenty-five years. However, Gyourko and Tracy's analysis suggests that this finding may not hold for low-skilled workers at the bottom of the income distribution. The real incomes of these households have not fully recovered to the levels reached before the 1990-91 recession, yet the constant-quality price of the housing bundle they typically consume has continued to rise in the 1990s. Therefore, to afford a single-family home, these households must be increasing the number of hours worked or shifting down to lower quality housing.
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Bibliographic InfoPaper provided by Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania in its series Zell/Lurie Center Working Papers with number 324.
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Other versions of this item:
- Joseph Gyourko & Joseph Tracy, 1999. "A look at real housing prices and incomes: some implications for housing affordability and quality," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 63-77.
- NEP-ALL-2002-03-14 (All new papers)
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